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Agriculture services means services related to agriculture product like transportation of agriculture product.
Also, there is requirement of tractor for cultivation, harvesting machine, testing in laboratory etc. are related to agriculture service.
Under ending regime services like storage of agriculture products, services related to food grain, loading and unloading of rice inspection of seed etc. were exempted.
Rearing of all lifeforms of animal is part of agriculture but doesn’t included rearing of horses, for food, fiber, fuel and raw material or other similar products.
Agriculture sectors contribute more than fifteen per cent of overall gross domestic product.
Agriculture sectors are connected with corporate industry like machinery production for cultivation, harvesting and transportation.
GST is essential to improve the transparency, reliability, timeline of supply chain mechanism. A better supply chain mechanism would ensure a reduction in wastage and cost for the farmers/retailers. GST would also help in reducing the cost of heavy machinery required for producing agricultural commodities.
Foods industry also wholly depends upon agriculture in term of raw material. In ending regime taxes on agriculture products were VAT/CST/ OCTROI/ purchased tax.
There are certain food items like rice, sugar, salt, wheat, flour which are exempted from CENVAT. Under the state VAT, cereals and grains are taxed at the rate of 4%. Agricultural products go through a lot of licensing and a number of indirect taxes (VAT, excise duty, service tax) under the current tax laws.
In addition, central government established National Agriculture Market (NAM). NAM is a path to remove different rate of taxation in different state.
Involving all the farmer and traders in the regulated markets with a common e-commerce platform for a transparent, impartial trade of agri-commodities can be termed as National Agricultural Market. Due to the different state VAT and APMC (Agricultural produce market committee) law’s, implementation of NAM scheme would be challenging.
GST is crucial for creating a path regarding the successful implementation of NAM. Most of the indirect taxes levied on agricultural products, would be subsumed under GST. GST would provide each trader, the input credit for the tax paid on every value addition.
Agricultural Services:
As per GST, agriculture means who carry out cultivation by himself, by labor or by servant on wage payment. Agriculture produces related to production from cultivation of plant and rearing of animal except rearing of horses on which there is no further processing.
There are some of Services where the GST are Exempted and Non-Exempted Services.
Exempted services-Directly related to production of agriculture product like cultivation, harvesting, threshing plant protection or testing.Labour service provided to agriculture. Processing like tending, pruning, cutting, cleaning, sorting grading etc. Renting or leasing of machinery. Loading, unloading and packing. Storage of agricultural product. Preconditioning, pre-cooling, labeling of fruit etc. Agriculture related services provided by Transport agency.
Non-Exempted Services-Rearing of horses for fiber, fuel, raw material etc. Service-related agriculture processed items.
Fertilizer and Seed:
Fertilizers an important element of agriculture was previously taxed at 6% (1% Excise + 5% VAT). In the GST regime, the tax on fertilizers has been increased to 12%.
Dairy products and Sectors:
Dairy product are subject to GST with different rate these are 5%, 12% and 15 percent. In GST regime unprocessed dairy product are exempted from GST.. Dairy products which exempted from GST are enumerated below: -
Fresh milk
Egg
Curd
Lassi
Buttermilk
Chena or Paneer
Natural honey
Some products like Ultra high temperature milk, Cream, yoghurt, Kephir, Whey, Edible product animal originated which is not specified anywhere etc. are liable to GST.
Fishery products:
During pre-GST regime fish and Fish products were exempted from tax. Under new GST law, unprocessed fish and fish product also exempted from GST.
Fish seeds whether processed or unprocessed.
Unprocessed good which related to cured or in frozen state.
Live, fish and cleaned fish except fish meat.
Aquatic invertebrates other than crustaceans and mollusk live fresh or chilled.
There are some fishery products which are placed under the GST Regime
Fish frozen excepted fish fillets and other fish meat.
Fish, dried, salted or in brine, smoked fished.
Crustaceans, whether in a shell or not, frozen dried, salted or brine.
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